The LRN ethics and compliance risk management practices report

Anonymous/Confidential Reporting Chann
Ethics & Compliance Offic
DETAILED RESULTS
Legal Departme
First Reporting Channel
Internal Ombudsm
After supervisors, 1 in 5 companies expects employees to report first using the % anonymous/
Respondents
confidential reporting channel. This result
0%
may 10% be linked 20% to why companies 30% report 40% that their 50%
% Respondents
two top challenges in detection are employee fear of retaliation and employees are not
motivated to report.
Supervisor 28%
0% 10% 20% 30% 40% 50%
Anonymous Reporting Channel
Supervisor 28%
Given that Ethics anonymous/confidential & Compliance Office 16% helplines are the second most common reporting
17%
channel, companies must sure they have qualified personnel to answer the lines and refer
Human Resources 13%
16%
allegations to the appropriate function.
Anonymous Reporting Channel
Ethics & Compliance Office
Legal Department
Human Resources 13%
No Set Policy
Legal Department 11%
Internal Ombudsman
No Set Policy 9%
17%
11%
9%
Nearly 1 in 3 companies expects employees to report violations first to supervisors.
9%
Given that supervisors Don't are Know expected 4% to be a first line of detection, it is incumbent on
9%
companies to fully educate supervisors so they know how to handle violation reports
Don't Know 4%
according to company policies. Again, this is also why involving managers in risk assessments
is beneficial for companies, given their greater knowledge of potential gaps and high risk
employees who might cause ethics or compliance problems.
Internal Ombudsman
First Reporting Channel
No set poli
13. What are your biggest challenges in detecting ethics and compliance violations
Employee fears of retaliation and lack of motivation lead the risk detection challenges.
Top Challenges
Anonymous/conf
Top Challenges
% Respondents
0% 20% 40% 60% 80% 100%
% Respondents
Employees fear retaliation
0% 20% 64% 40% 60% 80% 100%
Compliance eth
Employees not motivated
Employees fear retaliation 64%
Innapropriate uses
Employees not motivated 54%
Lack of formal management process
Innapropriate uses 46%
Employees don't understand
Lack of formal management process 42%
Insufficient staff to respond
Employees don't understand 33%
Other
Insufficient staff to respond 28%
No significant challenges
Other 19%
54%
46%
42%
33%
28%
19%
13%
No significant challenges
13%
Despite the prevalence of anonymous reporting channels, employees fear retaliation and lack
the motivation to report. Companies cited detection as their main challenge in 2008. Nearly
half of respondents indicate they have no significant problems in this area, while the other
half cites a wide range of challenges that hamper their detection efforts. Topping the list,
almost two-thirds companies believe their employees fear retaliation. Meanwhile, half the
companies cite employee lack of motivation to report violations a significant factor.
The irony of these statistics about fear of retaliation and employee apathy is that
organizations increased their efforts to communicate, educate employees about ethics and
compliance, and ensure they have ready access to report violations. The survey results show
that the nearly 9 out of 10 multinational companies offer at least three reporting methods
for employees to use in their home region, and 7 out of 10 have at least three methods
even in their international offices. Nearly all companies offer their workforce an anonymous
or confidential channel to report ethics and compliance violations, and in 2 out of 10 of
those enterprises, the company prefers the anonymous line to be its first line of reporting.
In addition, 4 out of 10 companies also offer an internal ombudsman as a “go-to” person
LRN | 2008 Ethics and Compliance Risk Management Practices Report | 33